Asia Pacific

German lawmakers approved a rescue for Cyprus as Finance Minister Wolfgang Schaeuble warned that refusing aid to a fifth crisis-ravaged state risked triggering a sovereign default and contagion to other euro nations, Bloomberg reported. The lower house, or Bundestag, backed German participation in the 10 billion-euro ($13 billion) financial lifeline by 487 votes to 101 with 13 abstentions in Berlin today, almost three years after the euro-area debt crisis first required lawmakers to act in May 2010. Lawmakers also approved extending aid terms for Ireland and Portugal.

The Hong Kong government has proposed measures to provide greater protection for creditors and simplify company liquidations in the first reform of the city's insolvency laws in almost 30 years, the South China Morning Post reported. Under the reform, companies are banned from selling their assets at below market prices up to five years before they wind up. Such below-market transactions mean companies can unload all valuable assets and leave too little for creditors such as employees, bankers or suppliers.

A credit boom in China failed to keep economic recovery on track in the first quarter, suggesting the cash sloshing around the economy is not yielding the desired effect of stoking growth and could instead exacerbate property and inflationary risks, Reuters reported in an analysis. A rapid rise in credit in recent months has been driven by the fast-growing shadow banking sector rather than formal bank lending, raising two major concerns.

South Korea unveiled a Won17.3tn ($15.4bn) supplementary budget on Tuesday to support the stalling economy, as domestic consumption remains sluggish while exports slow because of the weaker yen and cooling global demand, the Financial Times reported. The supplementary budget was larger than expected, mainly because it contained plans to raise debt to make up for anticipated tax revenue losses resulting from the slowing economy, and delays to the attempted sale of state holdings in two banks.

A Russian depositor has filed suit for the seizure of all assets in Russia belonging to Laiki Bank of Cyprus, including its controlling stake in Russia’s Rosprombank, which may now hamper a Cypriot plan to sell off the shares, RT.com reported. Presnensky Court in Moscow has received a lawsuit from ‘Y. G. Borisov’ against Laiki Bank – which operates in Russia under the Cyprus Popular Bank brand – and Rosprombank, in which Cyprus owns a 50.4 percent stake. Borisov has demanded the repayment of money that was seized from his account with the Cypriot bank; the exact sum was not disclosed.

The cost of bailing out Cyprus has swollen to euro 23 billion ($30 billion), with the crisis-hit country having to take on the lion's share of the measures needed to avoid bankruptcy, according to a draft document by the country's international creditors. The draft document, obtained by The Associated Press Thursday, says the country will have to find 13 billion euros ($17 billion) - an increase on the 7 billion euro contribution agreed during the country's chaotic bailout talks last month.

Cyprus has agreed to sell gold worth €400m from its reserves as a contribution to an international bailout, roiling the precious metal markets as investors feared it could set a precedent for other troubled eurozone countries. Nicosia’s plan to dispose of most of its gold holdings would be the first such sale by a country seeking international assistance since the Asian financial crisis in 1997-98, when South Korea asked the public to donate jewellery to the central bank for the good of the nation.

Cash-strapped Chinese solar panel maker Suntech Power Holdings Co Ltd is seeking to sell some assets and bring in a strategic investor to repay debt and revitalise the company, a person with direct knowledge of the matter told Reuters on Wednesday. "It is looking for buyers for some of its projects and downstream assets," said the source, who asked not to be identified as he was not authorised to speak to the media. "It is also seeking to bring in a strategic investor to take a stake in the company." "Suntech is in dire need of cash," the source added.

Cyprus yielded only to rich Luxembourg among euro-area countries in household wealth rankings as recently as 2010, while Germans were the statistical paupers in the bloc, according to data released by the European Central Bank on Tuesday, the Financial Times reported. The study, the first of its kind, is bound to fan indignation in Germany and other northern members of the currency union who see themselves as being the paymasters for heavily indebted southern countries, like Cyprus, Greece, Spain and Portugal, that have all sought international bailouts.

China’s sovereign credit rating has been cut by a major international agency for the first time since 1999 with Fitch raising concerns on Tuesday that the country’s rising debt problems will require a government bailout, the Financial Times reported. Fitch downgraded China’s long-term local currency rating from AA- to A+, citing a number of “underlying structural weaknesses” in the Chinese economy, including low average incomes, lagging standards of governance, and a rapid expansion of credit.